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Rozana Secures $22.5M to Bridge Rural E-commerce Gap in India

March 6, 2024
4 mins

Rozana, India’s leading rural commerce platform, has secured $22.5 million in a funding round led by Bertelsmann India Investments (BII). The round also saw participation from Fireside Ventures and 3one4 Capital, along with continued support from other existing investors. Additionally, the round welcomed Vivek Gupta, Co-Founder of Licious, who will join Rozana's board, further strengthening the company's strategic direction and growth trajectory.

Disrupting Rural E-commerce with Hyperlocal Sourcing and Peer Network

Founded in 2021, Rozana is a B2C social commerce platform dedicated to bridging the gap in e-commerce accessibility for rural and Tier 2 & 3 semi-urban communities in India. They currently serve over 12,000 villages across 13 districts, offering a comprehensive selection of essential goods. 

Rozana's unique model empowers rural communities through a network of over 20,000 peer partners, predominantly women residing in the villages they serve. These individuals act as local promoters, facilitators, and even micro-entrepreneurs, acquiring new customers, earning commissions on sales, and building their own dropshipping businesses using the platform. This ingenious approach not only fosters local female entrepreneurship but also fuels rapid customer base expansion without substantial upfront investment. 

Notably, over 90% of Rozana's users are first-time e-commerce customers, highlighting the platform's success in bringing digital commerce to previously unserved communities.

Instead of relying solely on brands, Rozana sources products directly from farmers, mandis, and B2B distributors, significantly reducing inventory holding and ensuring product freshness. This agile approach allows Rozana to cater to the unique needs and preferences of rural communities, filling a crucial market gap and fostering economic opportunity at the local level.

India's Untapped Rural E-commerce Market

The rural Indian market presents a significant opportunity, with a total market potential of $1.5 trillion, characterised by 300 million consumers largely dependent on unorganised retail. This market is ripe for disruption by e-commerce solutions tailored to the unique needs and challenges of rural consumers.

Rural India faces several challenges in shopping and accessing services, including limited product availability and logistical hurdles due to geographic dispersion. Only 8% of Indian consumers use online commerce, indicating a vast potential for digital expansion.

Rozana Strengthens Logistics, Tech, and Teams to Deepen Reach 

Rozana aims to use the new funding to drive growth across three key areas: expanding its warehousing and logistics to new districts for wider reach, enhancing its technology platform for better user experience and efficiency, and strengthening its team in technology, product development, and operations to support its expansion plans effectively.

“Rural India represents a massive and underserved ecommerce opportunity consisting of nearly 750-900 million people,” said Ankur Dahiya, CEO and co-founder of Rozana. “With this funding, we will continue building out our logistics and supply chain infrastructure to reach new districts and empower rural communities with access to essential products.”

“At 3one4 Capital, we are excited about the commerce potential waiting to be unlocked beyond tier-1 in India. With Rozana's deep network and consumer insight in this segment, they're poised to revolutionise and capitalise on this untapped market. We are thrilled to partner with the Rozana team as they lead the charge in transforming a peer-led distribution network, unlocking new avenues for commerce in India.” - Nitya Agarwal, VP at 3one4 Capital

Rozana’s innovative social commerce model, empowering local communities and fostering female entrepreneurship, combined with their deep understanding of rural consumer needs, positions them for significant growth and positive social impact.

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